HTML email and RSS

I am reading through the Community1 PDF by Sitepoint (which i am finding to be an extremely good reference for a beginner like me). About Email mark up. How does it work? How and where is the content ‘embedded’ into the website for the recipient. In short (but looking for a detailed info), how do RSS and HTML email newsletter work?

Off Topic:

For anybody that wants calcification the book referred to in post #1 is the SPF Community book: Thinking Web: Voices of the Community.Chapter 6.

Thank you for your response. I am on Chapter 6 as mentioned next to the link you provided. What i understand is that the HTML mail is coded and mailed separately.
The do’s and don’t for coding are very well explained in the document.
I still have question regarding the Subscribe link in many websites, where one has option to subscribe through email, or the RSS.

  1. When a user clicks on either of those, how and where is the response generated? (where are the client emails stored?)
  2. The chapter doesn’t talk about the RSS. How is it different from the HTML mail?
  3. Is there a way to notify, that the subscriber read the content provided?